The Indonesian Rupiah faces challenges amid a deteriorating fiscal picture and rising state-level borrowing. While Bank Indonesia’s commitment to FX stability may help slow depreciation, a sustained recovery requires stronger policy clarity. Risks are skewed towards USD/IDR resilience due to structural challenges, notes Lloyd Chan, Senior Currency Analyst at MUFG Bank.
Need for stronger policy clarity
“BI’s firmer commitment to FX stability and proactive market intervention can help slow the pace of rupiah depreciation, but a sustained IDR recovery requires stronger policy clarity, easing fiscal concerns, and improved investor sentiment.”
“Until then, risks remain skewed toward USDIDR staying resilient amid Indonesia-specific structural challenges.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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